Digital radio set to compete with 3G phones for 'killer applications'

Digital radio is set to be used as a cheaper and more efficient method to provide some of the services that 3G mobile phone operators had touted as their "killer" applications.

Digital radio is set to be used as a cheaper and more efficient method to provide some of the services that 3G mobile phone operators had touted as their "killer" applications.

The 3G players paid £22.5bn for their licences and need to make a return by charging premium prices for sophisticated new services, but digital radio licences were free and transmission costs are a fraction of those of a mobile phone network.

It is understood that there are now talks going on between digital radio companies and 3G network operators and the handsets manufacturers. A digital radio chip could be inserted into a 3G phone, allowing the technologies to be combined. However, digital radio's cost and technological advantages for some services may mean it is used as an alternative and competing technology.

A digital radio signal is capable of delivering much greater amounts of data to large numbers of consumers, at speeds of up to 240 kilobits per second, compared with 3G's typical 64 to 128 kb/s. The technology is suitable for some of the streaming broadcast services, such as video clips of football matches, promoted as unique selling points by 3G operators.

Simon Cole, the chief executive of UBC Media, the market leader for digital radio data services, said: "We provide an opportunity to them [mobile operators] to broaden their offering.... [but] if someone wanted to go to war with telecoms companies, they could. If telco's do not sit up and have this conversation, radio people will go ahead [with services] anyhow."

John Hall, the chief executive of Radioscape, a digital radio software company, said: "If 3G were planning to make money out of broadcasting large amounts of footage, there's an overlap [with digital radio]."

Radio technology is a much more efficient way of broadcasting the same information to large numbers of consumers, as it costs no more and takes up no greater capacity to send the information to one person or one million. By contrast, 3G phones may only be able to simultaneously broadcast rich video content to a few hundred users at a time. Where radio suffers is that it cannot offer a service "on demand" to consumers and it is one-way traffic – unlike a phone network, which is a two-way medium and has a built-in paying mechanism. That is why it makes sense to combine digital radio with telecoms services but this need not be a 3G phone – a less advanced mobile or a fixed line could be used as the "return loop".